Santander 123 account fee increasing to £5 from January

skea56

What is the alternative with the account then? Simply downgrade it to an basic current account?
Just done a few calculations there and after haggling my tv and broadband down my DD's are down to about £4.30ish CB. Would need to get 70p interest just to break even, and my balance is in and around £1600/1700 per month. Plus I pay for my mom's Sky and intend to ring them this week to haggle its price way down from £30 so that will push CB down even further.
I dont think even with scrimping I could get it over £2000 and 2% interest before the deadline.
Having taken a look at my history, the only time I've ever gone up over £5 was when DD's were high - interest on the balance has never been over £1, though now I've moved my Cash ISA into the current I may be able to keep it at least over £1000 for a few months.

With regards to the credit card, I still would be in profit by about £3-4 per month, but can I keep the CC and downgrade the bank acc?

I'm also on the 23 month interest free card so have more than a year to run on this too.

sk56

Lifes_Grand_Plan

What is this talk of 2.96% interest.... thought it was 3%?!?!

Am I being stupid?

YorkshireBoy

Lifes_Grand_Plan wrote: »

What is this talk of 2.96% interest.... thought it was 3%?!?!

You always earn interest at the gross p.a. rate. If this interest remains in the account it will compound to 3% AER...but not if you've £20K in there all the time.


But you must have seen the 2.96% figure quoted on their website?

Archi_Bald

skea56 wrote: »

What is the alternative with the account then?

Look at a different current account provider. Some will even pay you to switch to them (e.g. Natiownide, Halifax). Tesco pay you 3% on your entire balance up to £3K, and you can have 2 of them. They don't have a switch bonus, though

skea56 wrote: »

With regards to the credit card, I still would be in profit by about £3-4 per month, but can I keep the CC and downgrade the bank acc?

yes, you can hold the 123 CC without needing a 123 current acct.

skea56

Tesco looks good, though in Northern Ireland, my nearest store for deposits and withdrawals is about 30 mile away so not too convenient, but I could maybe keep the Santander basic and transfer into it.

Thanks

Archi_Bald

Didn't know you are in NI - - I think they don't offer their current account in NI. Still, there are other options open for you.

Dird

NatWest's chance to shine from 2016?

Chaykin

the interest the account pays for those with more than about £4,500 in it, still beats the top cash savings accounts

How did they work this out?
4500 x 2.96% x 0.8 = 106.56
106.56 - 60 = 46.56 which equals to about 1.3% gross p.a.
So there are better accounts for people with £4,500.00...

johnny_c

I have the 123 current account and 123 cashback (creditcard).. I have around £14000 in my 123 current account and got £27.24 interest this month after tax. I pay in about £1000 a month and am currently paying £2 (rising to £5) for the privilege of having the account . This account is my only account. I have no 'savings' account as it were. I seem to make VERY FEW benefits on having the 123 cashback credit card. In the last 31 days I earned £2.65. So I think I should ditch the credit card in any case immediately (it was offered free to me for 12mths).

With the increase in the cost of having the account raising to £5 - is it better for me to go elsewhere or to use an ISA to put this money? Many thanks!

Consumerist

I wondered what effect the changes would have at various balances on the account and, assuming nothing else changes between now and April 2016, I came up with a rough and ready table to estimate the effective interest rate the 123 current account would pay from April 2016, as follows:

Bal     Gross   BR Tax  Annual  Annual     Effective
(£)     Int     (0%)    fee     proceeds   Rate
-----------------------------------------------------
20K     592     0       60      532        2.7%
19K     570     0       60      510        2.7%
18K     540     0       60      480        2.7%
17K     510     0       60      450        2.6%
16K     480     0       60      420        2.6%
15K     450     0       60      390        2.6%
14K     420     0       60      360        2.6%
13K     390     0       60      330        2.5%
12K     360     0       60      300        2.5%
11K     330     0       60      270        2.5%
10K     300     0       60      240        2.4%
 9K     270     0       60      210        2.3%
 8K     240     0       60      180        2.3%
 7K     210     0       60      150        2.1%
 6K     180     0       60      120        2.0%
 5K     150     0       60       90        1.8%
 4K     120     0       60       60        1.5%
 3K      90     0       60       30        1.0%
 2K      40     0       60      -20       -1.0%
 1K      10     0       60      -50       -5.0%

So at balances above about £4K, the effective rate will be comparable with savings accounts.

Edit
Sorry the columns turned out a bit wonky. Hope it's understandable.